National News

No need for rates rise - Carney

File photo dated 18/12/13 of Governor of the Bank of England Mark Carney who said there is "no immediate need" to increase interest rates despite unemployment nearing the 7% threshold he mooted for a rise.

Mark Carney has insisted there is 'no immediate need' to increase interest rates

File photo dated 18/12/13 of Governor of the Bank of England Mark Carney who said there is "no immediate need" to increase interest rates despite unemployment nearing the 7% threshold he mooted for a rise.

Mark Carney has insisted there is 'no immediate need' to increase interest rates

Bank of England governor Mark Carney has insisted there is "no immediate need" to increase interest rates despite unemployment nearing the 7% threshold he mooted for a rise.

In an apparent softening of his 'forward guidance' policy, he said the Bank would look at "overall conditions in the labour market" rather than one indicator.

He also signalled that when rates change it will be a gradual process.

The comments, in an interview with the BBC's Newsnight programme, came as the pound continued to rally on speculation of an imminent increase.

The Bank had not expected unemployment to fall to 7% for two years, but this week the level fell sharply to 7.1%.

Mr Carney said the UK economy was "in a different place" to when he introduced the guidance.

"We don't see an immediate need to change monetary policy," he said.

Asked if he would consider lowering the 'forward guidance' threshold, Mr Carney said: "There are a broad range of things we could do, I would not jump to that conclusion...

"(What) we're trying to get across is that it is all about overall conditions in the labour market.

"We wouldn't want to detract from that focus by unnecessarily focusing on one indicator."

Mr Carney played down the importance of the International Monetary Fund (IMF) revising the UK growth forecast upwards, stressing that the economy was "coming off a low base" and still below its 2008 levels.

"The worst of the crisis is behind us but the financial system is not functioning as well as it could," he said. "Uncertainty among households and businesses is still preventing investment."